Tata Steel raises Rs2,700 crore from holding company

Mumbai: Tata Steel has raised Rs1,380 crore through conversion of 2.85 crore warrants by Tata Sons. The warrants were converted at a price of Rs484.27 each, aggregating to about Rs1380 crore. Tata Steel said it would mop up an equal amount by allotting shares to the holding company as part of its fund-raising exercise for the Corus takeover, the company said in a filing with the Bombay Stock Exchange (BSE).

Tata Steel Ltd had earlier announced that Tata Sons Ltd, on April 16, exercised the option to convert 2,85,00,000 warrants into ordinary shares of the company at a price of Rs484.27 each.

Tata Steel had said it would sell equity shares worth $2.3 billion in domestic and overseas markets, besides raising $6.1 billion in debt to fund acquisition of Anglo-Dutch firm Corus Group Plc.

Tata Steel said after market hours on April 17 that it would raise $4.1 billion to help fund the deal, of which 12 per cent would come via debt and the rest would be equity.

The company said it would raise Rs3,655 crore in a rights share issue and Rs4,350 crore on a rights basis in an offering of convertible preference shares to help fund the $12.9 billion net cost of the takeover.

An issue of preference shares that could be converted into equity after two years is expected to reduce 2007-08 earnings per share by 10 per cent.

Tata Steel said it was also looking at a foreign issue of an equity-related instrument to raise up to $500 million, with an issue of global depositary

The Tata Steel share was trading at Rs509.55, down Rs19.10 or 3.61 per cent on the BSE.. The stock hit an intraday high of Rs523.90 and a low of Rs496.35. The total traded volume was 2,753,438 compared to an average 2,362,262 for the past two weeks.